Oil surges as Brent closes above $100 after Iran vows Hormuz will stay shut
Brent settled above $100 a barrel for the first time since August 2022 as Iran vowed to keep Hormuz shut, deepening fears over global oil supply
Crude oil prices closed above the $100-a-barrel mark on Thursday after Iran’s new supreme leader, Mojtaba Khamenei, vowed to keep the Strait of Hormuz shut, signalling that markets may be facing a prolonged supply disruption. Brent crude, the international benchmark, rose 9.2% to settle at $100.46 a barrel, the first close above $100 since August 2022. US West Texas Intermediate crude also jumped, settling at about $95.70 a barrel.
The move came after Khamenei reiterated that the Strait of Hormuz would remain closed, heightening fears over oil flows from the Gulf. The statement added to worries already building from attacks on tankers and wider transport infrastructure in Iraqi waters and elsewhere in the region. Reuters reported that the latest violence had further strained energy supplies and halted some oil port operations, reinforcing the sense that disruption could persist.
The Strait of Hormuz is one of the most strategically important oil chokepoints in the world, with roughly one-fifth of global oil trade normally passing through it. That is why markets reacted so sharply to Tehran’s latest message. The surge in prices reflected concern not just about current losses, but about how long supply could remain constrained if shipping through the strait does not resume.
The price rally came despite an unprecedented decision by the International Energy Agency and its member countries to release emergency crude reserves.
Reuters reported that the IEA had agreed to a record 400 million-barrel release, while the United States was expected to account for the bulk of the effort through its strategic reserves. Even so, investors appeared unconvinced that this would be enough to offset the supply gap caused by the closure of Hormuz.
Analysts said the market’s muted response to the reserve release showed how deeply traders doubted it could fully plug the shortfall.
Goldman Sachs said it now expects a longer disruption than previously assumed, with sharply reduced flows through Hormuz for about three weeks followed by a gradual recovery. The bank also warned that if the disruption persists through March, spot prices could even exceed the 2008 record highs.
Another reason for continued volatility is uncertainty over timing and logistics. Although governments have announced major reserve releases, it is still unclear how quickly that oil can actually reach the market. Reuters noted that logistical bottlenecks and the fragmented nature of stockpile holdings across countries could slow deliveries, leaving traders worried that the measures may not provide the immediate relief the market wants.
By Friday morning in Asia, crude prices were still pushing higher after the overnight surge. Market updates showed WTI trading near $97 a barrel, while Brent remained around Thursday’s elevated settlement level after one of the most volatile trading weeks in recent years. Investors continued to brace for more turbulence as Iran maintained its hard line on Hormuz.
For now, the oil market is sending a clear signal: until crude can move more freely through the Strait of Hormuz again, traders are likely to keep pricing in the risk of tighter supply, prolonged disruption and further upside pressure on energy prices.
